by Robert Levine
Access has turned the old assembly line model on its head. The future belongs to companies that develop Access as a core competency, connecting goods and markets so nimbly that tthey're leading the creation of new models for others.
Last summer, before Steve Manning's son started Arizona State University, he brought him to an Office Depot in Dublin, Calif., to buy a Hewlett-Packard laptop. A computer has been standard equipment for many college freshmen since the early ‘90s, but the way they are bought and delivered has changed quite a bit since that time. "I configured it as we wanted at a kiosk, and it was made to order and sent to us," Manning remembers. "And we could track it through a Web site." Manning finds this all the more impressive because he knows that what looks east in a store is anything but. Processors must be procured, components matched up and machines assembled — all on tight deadlines, for an advantageous price, and with an efficiency that allows the customer to check on the status of his machine at any time from halfway across the world.
Manning knows so much about the revolution in electronics manufacturing because he played a part in it. In 1989, when mainframe computer maker Unisys got out of the disk drive business, Manning started a business to service the ones that company had already sold. At the time, this was an unusual business: mainframe companies sold packages that included installation and service. But as PCs began to dominate the industry, Manning's company, Sequel, thrived by servicing them more efficiently than the companies who made them. In 1999, Sequel was purchased by Solectron, a California-based company that also assembles set-top boxes and servers, and provides contract design and manufacturing services throughout North America and Europe. Manning became a senior vice president of global services.
"The opening of borders lets companies have these long supply chains that run around the world," says Michael Palma, a senior research analyst at IT market research firm IDC. "Now you can make silicon chips in Taiwan, a motherboard in Malaysia, and do final assembly in San Jose, Calif." As a result, devices like computers and cell phones — seen as luxury goods a generation ago — are now available for a few hundreds dollars or less. As with much else in today's economy, the key is Access: the ability to connect with goods, information and people around the world.
Solectron: Access as a Service
Some of the physical aspects of Access are obvious — products get to stores - or directly to consumers. But other aspects are important as well: Goods couldn't be made in countries like China efficiently if it weren't possible to send orders or money there and receive regular updates on their status. In order to make products efficiently, companies also need to have a way of finding out who can do the job, where they are and what their availability is."
Most customers assume that the electronics they buy could be made anywhere, from San Jose to Shanghai. What's not always obvious is the importance of companies collectively known as EMS (or "electronic manufacturing service") firms, including Solectron. Many started assembling printed circuit boards and PCs out of standard components, and then began doing more complex work, such as making motherboards and even designing basic technology. (Solectron mostly makes complex components, such as high-end servers, telecommunications equipment and medical devices.) EMS firms let the companies that contract them focus on what they do best, according to Palma — usually marketing and innovation. Of course, none of these could be done without the kind of information management that let Manning's son follow the progress of his machine — and lets companies like Hewlett-Packard look for supply chain partners that can source and price the component and put it together. "It's about flexibility and speed," Manning says. "You really have to look around corners."
Thinking Big at Crocs
Even in less complex industries, access to information allows companies to manage their sourcing and inventory in ways that would have been unimaginable a decade ago. A few years ago, some college friends decided to start making Crocs, ungainly shoes that the company of the same name molds out of a special resin patented by a Canadian company. As Crocs grew, the owners noticed that some customers often bought several pair in several different colors. So they decided to rethink their distribution process to make sure demand was being met.
Two years ago, to fill the position of CEO, Crocs brought in Ron Snyder, a former executive at Flextronics, a competitor of Solectron and that Microsoft's original Xbox, among other devices. He decided to think big, introducing the kind of supply chain logistics used in the electronics business, which were all but unheard of in the footwear world. Most shoemakers require retailers to order their products six months in advance, so they often don't get enough shoes or have to discount a surplus. Snyder cut the order time down to weeks by operating Crocs with a sophisticated global infrastructure of manufacturing and distribution centers. With facilities in six countries, retailers have access to the goods without long ship times, so the company can make sure the stores have the shoes they need in the styles, colors and sizes they want.
Partly on the strength of this system, Crocs is on track to see a reported $820 milion worth of shoes in 80 countries this year. And it could not do so without access. And it could not do so without Access — to the Canadian company that makes the resin (acquired by Crocs in 2004), the manufacturing facilities (in Canada, China, Italy, Mexico, Romania and the United States) that turn out the shoes and, just as importantly, distribution logistics that are among the best in the business.
CD Baby Turns the Tables
As Access expands, so does opportunity — not only for large companies but for anyone who has a product they would like to reach the world. Take Derek Sivers. A decade ago he was living in Woodstock, New York, playing in a funk band called Hit Me and selling the group's homemade album at concerts. Fans liked it. But he couldn't get it into the hands of established stores, who told him he needed to go through a distributor, and he had a hard time finding one of those without a label. He was even turned down when he offered let online retailers like Amazon.com sell it on consignment. For countless other frustrated musicians, that would have been the end of the story.
Not for Sivers. He realized that the Internet offered him access to his audience without a label or a distributor getting the way. So he started to sell the group's CD on its Web site. So many other bands asked him to do the same that the site didn't have room for them all, and he figured he ought to start a business. His girlfriend came up with a name — CD Baby — and he expanded from selling on his site into distributing CDs to larger store chains. At first, the fledgling company had to ship CDs around the country. But now that the music business is moving into the digital age, Access has advanced along with technology, and about 30 percent of the money the company has paid to artists is from digital sales revenue from online music stores like iTunes. Here's how it works: for a $35 fee, CD Baby will get a band's music to all the major online retailers, whether or not the band has a label, a manager or even fans that aren't related to them. CD Baby collects money from those sales — usually about 65 cents if the retail price is a dollar — and after taking its cut, passes that money back to the band.
At a 9 percent profit margin, CD Baby's is among the lowest in the industry. Bands can keep roughly half of the revenue from digital sales (the online store takes a share as well), and about a third from physical CDs — far more than they would at a major label. The company now has 80 employees, more than 190,000 artists and $20-plus million in income since it started. Many of the artists that use CD Baby are in the situations Sivers was in. But since the company is global, it also draws bands that are popular in other countries and have a small following in the United States. And unlike other distributors, CD Baby sets no limit — big or small — on the amount of music bands can sell. Be a best seller or a never sell, it's all the same to CD Baby. And with that unspoken mantra, the sky's the limit for artists. In a globalized business world, Access is a great equalizer.
by Robert Levine
Access has turned the old assembly line model on its head. The future belongs to companies that develop Access as a core competency, connecting goods and markets so nimbly that tthey're leading the creation of new models for others.
Last summer, before Steve Manning's son started Arizona State University, he brought him to an Office Depot in Dublin, Calif., to buy a Hewlett-Packard laptop. A computer has been standard equipment for many college freshmen since the early ‘90s, but the way they are bought and delivered has changed quite a bit since that time. "I configured it as we wanted at a kiosk, and it was made to order and sent to us," Manning remembers. "And we could track it through a Web site." Manning finds this all the more impressive because he knows that what looks east in a store is anything but. Processors must be procured, components matched up and machines assembled — all on tight deadlines, for an advantageous price, and with an efficiency that allows the customer to check on the status of his machine at any time from halfway across the world.
Manning knows so much about the revolution in electronics manufacturing because he played a part in it. In 1989, when mainframe computer maker Unisys got out of the disk drive business, Manning started a business to service the ones that company had already sold. At the time, this was an unusual business: mainframe companies sold packages that included installation and service. But as PCs began to dominate the industry, Manning's company, Sequel, thrived by servicing them more efficiently than the companies who made them. In 1999, Sequel was purchased by Solectron, a California-based company that also assembles set-top boxes and servers, and provides contract design and manufacturing services throughout North America and Europe. Manning became a senior vice president of global services.
"The opening of borders lets companies have these long supply chains that run around the world," says Michael Palma, a senior research analyst at IT market research firm IDC. "Now you can make silicon chips in Taiwan, a motherboard in Malaysia, and do final assembly in San Jose, Calif." As a result, devices like computers and cell phones — seen as luxury goods a generation ago — are now available for a few hundreds dollars or less. As with much else in today's economy, the key is Access: the ability to connect with goods, information and people around the world.
Solectron: Access as a Service
Some of the physical aspects of Access are obvious — products get to stores - or directly to consumers. But other aspects are important as well: Goods couldn't be made in countries like China efficiently if it weren't possible to send orders or money there and receive regular updates on their status. In order to make products efficiently, companies also need to have a way of finding out who can do the job, where they are and what their availability is."
Most customers assume that the electronics they buy could be made anywhere, from San Jose to Shanghai. What's not always obvious is the importance of companies collectively known as EMS (or "electronic manufacturing service") firms, including Solectron. Many started assembling printed circuit boards and PCs out of standard components, and then began doing more complex work, such as making motherboards and even designing basic technology. (Solectron mostly makes complex components, such as high-end servers, telecommunications equipment and medical devices.) EMS firms let the companies that contract them focus on what they do best, according to Palma — usually marketing and innovation. Of course, none of these could be done without the kind of information management that let Manning's son follow the progress of his machine — and lets companies like Hewlett-Packard look for supply chain partners that can source and price the component and put it together. "It's about flexibility and speed," Manning says. "You really have to look around corners."
Thinking Big at Crocs
Even in less complex industries, access to information allows companies to manage their sourcing and inventory in ways that would have been unimaginable a decade ago. A few years ago, some college friends decided to start making Crocs, ungainly shoes that the company of the same name molds out of a special resin patented by a Canadian company. As Crocs grew, the owners noticed that some customers often bought several pair in several different colors. So they decided to rethink their distribution process to make sure demand was being met.
Two years ago, to fill the position of CEO, Crocs brought in Ron Snyder, a former executive at Flextronics, a competitor of Solectron and that Microsoft's original Xbox, among other devices. He decided to think big, introducing the kind of supply chain logistics used in the electronics business, which were all but unheard of in the footwear world. Most shoemakers require retailers to order their products six months in advance, so they often don't get enough shoes or have to discount a surplus. Snyder cut the order time down to weeks by operating Crocs with a sophisticated global infrastructure of manufacturing and distribution centers. With facilities in six countries, retailers have access to the goods without long ship times, so the company can make sure the stores have the shoes they need in the styles, colors and sizes they want.
Partly on the strength of this system, Crocs is on track to see a reported $820 milion worth of shoes in 80 countries this year. And it could not do so without access. And it could not do so without Access — to the Canadian company that makes the resin (acquired by Crocs in 2004), the manufacturing facilities (in Canada, China, Italy, Mexico, Romania and the United States) that turn out the shoes and, just as importantly, distribution logistics that are among the best in the business.
CD Baby Turns the Tables
As Access expands, so does opportunity — not only for large companies but for anyone who has a product they would like to reach the world. Take Derek Sivers. A decade ago he was living in Woodstock, New York, playing in a funk band called Hit Me and selling the group's homemade album at concerts. Fans liked it. But he couldn't get it into the hands of established stores, who told him he needed to go through a distributor, and he had a hard time finding one of those without a label. He was even turned down when he offered let online retailers like Amazon.com sell it on consignment. For countless other frustrated musicians, that would have been the end of the story.
Not for Sivers. He realized that the Internet offered him access to his audience without a label or a distributor getting the way. So he started to sell the group's CD on its Web site. So many other bands asked him to do the same that the site didn't have room for them all, and he figured he ought to start a business. His girlfriend came up with a name — CD Baby — and he expanded from selling on his site into distributing CDs to larger store chains. At first, the fledgling company had to ship CDs around the country. But now that the music business is moving into the digital age, Access has advanced along with technology, and about 30 percent of the money the company has paid to artists is from digital sales revenue from online music stores like iTunes. Here's how it works: for a $35 fee, CD Baby will get a band's music to all the major online retailers, whether or not the band has a label, a manager or even fans that aren't related to them. CD Baby collects money from those sales — usually about 65 cents if the retail price is a dollar — and after taking its cut, passes that money back to the band.
At a 9 percent profit margin, CD Baby's is among the lowest in the industry. Bands can keep roughly half of the revenue from digital sales (the online store takes a share as well), and about a third from physical CDs — far more than they would at a major label. The company now has 80 employees, more than 190,000 artists and $20-plus million in income since it started. Many of the artists that use CD Baby are in the situations Sivers was in. But since the company is global, it also draws bands that are popular in other countries and have a small following in the United States. And unlike other distributors, CD Baby sets no limit — big or small — on the amount of music bands can sell. Be a best seller or a never sell, it's all the same to CD Baby. And with that unspoken mantra, the sky's the limit for artists. In a globalized business world, Access is a great equalizer.
การแปล กรุณารอสักครู่..
